One Grayslake man and a former suburban man were sentenced Tuesday to federal prison for running a sham minority-owned cable television installation businesses, which obtained $8.3 million in subcontracts from a cable company that serves residents on the city's north side, according to a U.S. Attorney's office/Chicago press release.
Matthew Giovenco, 43, of Grayslake, and Guy Potter, 67, of Versailles, Kent., and formerly of Bensenville, were sentenced to 4 1/2 years in prison for the scam. Their prison sentences will begin on Dec. 2.
The two owned and operated the now-defunct ICS Cable, Inc., which they disguised as a minority-owned business — despite neither of them being minorities — to obtain city-mandated minority sub-contracts under the lakefront cable franchise held by RCN Telecom Services of Illinois LLC, according to the news release.
According to the trial evidence and court records, RCN’s cable franchise agreement required it to sub-contract 40 percent of the cable installation and disconnection services to city-certified minority-owned businesses.
Between April 2003 and October 2006, Potter and Giovenco assisted in getting at least $8.3 million from RCN by falsely representing that a co-defendent, Jerone Brown, owned and operated ICS.
Brown and his mother, Cherone Mayes, paid a $500 bribe to a city employee to expedite the minority-owned business (MBE) certification for ICS . Both Brown and Mayes have been convicted on six counts of mail fraud and face sentencing.
In addition to the prison time, Giovenco and Potter were ordered this past week to pay $2.2 million in profits and to pay $217,580 in restitution to RCN.
“The defendants engaged in a lengthy fraud scheme that resulted in millions of dollars of contracts being diverted from legitimate minority- and women-owned businesses,” Assistant U.S. Attorney Jessica Romero argued at sentencing, according to the news release.
The information in this article came from a U.S. Attorney's Office/Chicago press release.